It is known for businesses to allocate large amounts of time and money to business planning. This is because business planning is an essential part of informed financial decision-making. For example, business planning is essential for determining and creating future budgets, such as to cost new product development and product launches, or to cost anticipated changes in the price of raw materials or in taxation rules. Business planning is also a key tool in successfully managing business mergers and takeovers. Therefore, a need exists for business planning tools.
At the most basic level, spreadsheets can be used as business planning tools. Spreadsheets are relatively inexpensive to buy and are reasonably easy to use for relatively simple applications. Spreadsheets use basic building blocks, namely cells contained in worksheets and workbooks. Relationships between the cells can be set up to perform calculations on data to produce useful outputs. However, due to the simple structure of spreadsheets, it is difficult to model a relatively complex commercial enterprise with inherent flexibility. This is because, once set up, spreadsheets are difficult to adapt. Complex relationships between cells must be considered before new cells are added. Output data cells must be reconfigured to ensure new input data is taken into account. All of this is time consuming and complex, resulting in inefficient or inaccurate models. Alternatively, spreadsheets are not always maintained due to the time and effort required to make changes, resulting in a spreadsheet model that is not kept up to date with changes to the business.
As a result, more complicated business planning tools have been developed, such as the IBM Cognos 8 Planning tool (Cognos is a registered trade mark owned by Cognos Incorporated of Canada). These are generally based on a Cube/Dimension/Link paradigm. This paradigm has served the industry well for nearly thirty years, and it is possible to build a fully operational model of a complex commercial activity using this paradigm. The planning tool uses a series of cubes to represent operational data with a series of links to move the data to the correct place for output. However, there are two main drawbacks with the Cube/Dimension/Link paradigm, namely that (a) maintenance is difficult and (b) models must be built from scratch every time.
With regard to (a), maintenance is difficult because knowing exactly what impact a particular change might have on other aspects of the model requires specialist knowledge of the product, and a good understanding of the model. Maintenance is best done by the person who built the model in the first place, which is very inflexible. Even adding a single new item may require several links to be manually updated.
With regard to (b), models must be built from scratch because it is difficult to change an existing model. It is not possible to take an existing model built for one customer, and adapt it for another customer. This is because, due to the Cube/Dimension/Link paradigm, it is too hard to know whether the model has been fixed up correctly.
As a result, specialist consultants are employed to develop and maintain models using the Cube/Dimension/Link paradigm. This leads to very high set-up and running costs, and to an inflexible, difficult to use system. Regrettably, this means that small and medium-sized enterprises cannot fully benefit from comprehensive business planning models. In turn, this can impact on their future performance.
Another product, namely Adaptive Planning, has been developed to address these issues (Adaptive Planning is a registered trade mark of Adaptive Planning, Inc. of the United States). The Adaptive Planning product relies on a more basic paradigm and uses a chart of accounts organised onto sheets rather than Cubes/Dimensions/Links. All dependencies between accounts are expressed through formulas. In practice, this is difficult to manage. For example to apply certain calculations to each of several hundred accounts would require many hundreds of additional accounts to be created, and the required calculations to be repeated many times over. Also, many types of commonly used calculations are hard to implement using the basic paradigm. Therefore, custom calculations need to be specified to create “modelled accounts” which do not roll up in the normal way. These modelled accounts must be explicitly linked and require the use of a specialist consultant. Also, to create a dynamic forecasting system it is very complicated to implement the necessary links. A consultant is normally required.
In general, the prior art systems normally require high set-up and maintenance costs, and may lead to an inflexible, difficult to use system.
Therefore, there is a commercial need for a system which addresses the problems associated with the known products and paradigms described above, namely a system which is relatively inexpensive and flexible, and which is quick and easy to set up, use and maintain.
An aim of the invention is to provide such a system. At the very least, it is an aim of the invention to provide a system which attempts to solve one or more of the above-mentioned problems with the prior art.